NZD/USD bounces toward 0.6100 after US labour market data

The NZD/USD pair jumped above 0.6090 showing a 0.95% increase on the day.
US Initial Jobless Claims for the week ending on June 2 increased to 261K.
Falling US yields amid dovish bets on the Fed weakened the US Dollar.

Patricio Martín FXStreet

The NZD/USD pair experienced a significant surge, surpassing the 0.6090 level and marking a 0.95% increase on the day. This rise was influenced by multiple factors, including the US Initial Jobless Claims for the week ending June 2, which unexpectedly accelerated, fueling dovish expectations towards the upcoming Federal Reserve (Fed) meeting. The USD lost interest on the back of falling US bond yields.

US bond yields decline following Jobless Claims data, eyes on CPI

US Initial Jobless Claims for the week ending on June 2 came in at 261K vs the 235K expected and accelerated from its previous reading of 233K. The rising number of people claiming unemployment benefits in the US hints at weakness in the labour market amid the contractive monetary policy by the Federal Reserve (Fed) which makes investors foresee a less aggressive stance for the upcoming meetings. The CME FedWatch Tool suggests that investors are placing higher probabilities on the Fed refraining from hiking rates in the next meeting scheduled for June 13-14, and instead, keeping the target rate steady at 5.25%.

Against this backdrop, US bond yields slid across the curve with the 2-, 5- and 10-year rates lower on the day.

The forthcoming US Consumer Price Index (CPI) data is expected to play the most crucial role in determining the Fed decision. Analysts predict a decrease in the year-on-year headline inflation rate to 4.2% in May from the previous 4.9%, while the core rate is anticipated to rise to 5.6% from its previous reading of 5.5%.

NZD/USD levels to watch

According to the daily chart, the NZD/USD holds a short-term neutral to bearish outlook. Despite technical indicator showing growing bullish momentum, the bearish cross performed by the 20-day Simple Moving Average (SMA) sliding below the 200-day SMA suggests that the negative outlook for the NZD is intact.

On the downside, support levels line up at 0.6050, 0.6030 and the psychological mark of 0.6000. On the other hand, immediate resistance is seen at 0.6115, followed by the 0.6130 - 0.6150 zone, where the mentioned SMAs charted the bearish cross.

NZD/USD daily chart

NZD/USD

Overview
Today last price	0.6095
Today Daily Change	0.0058
Today Daily Change %	0.96
Today daily open	0.6037

Trends
Daily SMA20	0.6138
Daily SMA50	0.6194
Daily SMA100	0.624
Daily SMA200	0.6149

Levels
Previous Daily High	0.6097
Previous Daily Low	0.6031
Previous Weekly High	0.6112
Previous Weekly Low	0.5985
Previous Monthly High	0.6385
Previous Monthly Low	0.5985
Daily Fibonacci 38.2%	0.6056
Daily Fibonacci 61.8%	0.6072
Daily Pivot Point S1	0.6013
Daily Pivot Point S2	0.5989
Daily Pivot Point S3	0.5947
Daily Pivot Point R1	0.6079
Daily Pivot Point R2	0.6121
Daily Pivot Point R3	0.6145

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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